Optimizing building performance

• Building systems silently deteriorate over time, eroding Net Operating Income (NOI) through energy leakage and avoidable expenses. This performance “drift” creates an efficiency gap and significant untapped value.
• Regulations, electricity prices, and occupier expectations amplify the cost of inefficiency. Efficiency mandates for existing buildings are strengthening across APAC, while 42% of CRE and business leaders expect energy costs to have the greatest impact on total occupancy costs in the next 3-5 years.
• Building optimization achieves energy savings with minimal capital outlay. Retro-commissioning and tuning deliver quick wins with payback periods often under 1 year.
• In the shift to perpetual optimization, AI-driven technology enables scale but people sustain results. On-site team capability and cross-functional collaboration remain critical to maintain gains over time.

A silent value erosion is underway across commercial real estate buildings in APAC. Buildings that once operated at peak efficiency decline through “performance drift”, where they become less efficient over time due to system deterioration, equipment wear, and operational changes. The resultant energy leakage and (avoidable) costs compound year after year, eroding net operating income.

Evidence from Hong Kong demonstrates the scale of this issue; the intervention of tuning 24 commercial buildings back to peak efficiency achieved approximately 1.9%-9.5% annual electricity savings. Similarly in the United States, systematic correction of building systems delivered $0.17–$2.22 USD per square foot in savings across 76 buildings.

Against global decarbonization targets, these incremental losses take on new significance. The UNEP reports that global building stock operational emissions must plummet by 56% by 2030 to align with the 2050 net-zero pathway. Despite a modest reduction in operational energy intensity since 2015, the sector falls short of the 25% decline required. Since most buildings that will exist in 2030 are already standing today, the decarbonization opportunity lies in tackling energy-related emissions in existing stock.

Building energy use benchmarking reveals the opportunity varies widely across markets. Energy Use Intensity (EUI) is often used as a proxy to benchmark efficiency. However, it is also influenced by climate differences or operational norms (e.g. longer retail hours), and not just operational efficiency. Individual building assessments remain essential, as a building with "good" EUI relative to market average may still harbor substantial room for optimization.

Energy-intensive existing assets face mounting regulatory risks and penalties across APAC. Advanced markets face immediate risk, with mandates for energy-intensive buildings to reduce their energy use. Non-compliance carries penalties ranging from public disclosure (reputational risks) to direct fines.

On the other hand, government incentives across APAC improve the business case for energy improvement works and accelerate return on investment. For instance, Singapore’s Green Mark Incentive Scheme for Existing Buildings 2.0 awards grants for energy retrofits based on carbon abatement and certification level achieved. Hong Kong’s CLP Eco Building Fund provides up to 50% subsidies for energy saving improvements and 100% for retro-commissioning.

Beyond compliance, electricity costs compound the pressure on operating expenses. Commercial electricity prices across major APAC markets have experienced greater volatility and increases over the past decade as energy markets undergo deregulation. The impact is direct: energy utility costs rank as the top concern among APAC CRE and business leaders in JLL’s Future of Work 2026 survey, where 42% expect energy utility costs to have the greatest impact on their total occupancy costs. JLL Research also found that for 87% of APAC occupiers, energy cost savings are a C-suite priority in the next three years.

Looking ahead, 2 in 5 APAC leaders believe rising energy costs, grid capacity constraints, and electrification will be the most transformative forces for their portfolios through 2030. Organizations prioritizing energy efficiency and load management will increasingly favor energy-smart assets, driving demand for optimized buildings. The question for asset owners is how quickly they can demonstrate leadership in improving their building’s energy performance.

Perceived costs and uncertainty around return on investment are key barriers to action. Yet, building optimization programs offer a low-cost, quicker alternative to relatively expensive retrofits. These systematic interventions investigate underperforming systems, fine-tune inefficient equipment, controls and operations, and maximize efficiency without incurring capex.

Building optimization encompasses two primary approaches: retro-commissioning (RCx) and building tuning and optimization (BTO). RCx is a once-off systemic investigation and implementation of energy saving opportunities (ESO), while BTO is a periodic or ongoing process. The results are energy savings with payback periods frequently under twelve months and minimal impact on occupants.

Heating, Ventilation and Cooling (HVAC) systems account for the bulk of office building electricity consumption across APAC and are the primary target for intervention.

Four case studies demonstrate tangible outcomes of building optimization across different market contexts:

Technology is reshaping what's possible at scale. Leading organizations are moving beyond basic Building Management Systems (BMS) toward AI-driven optimization platforms that integrate IoT sensors, equipment-level data, and external APIs to enable continuous performance monitoring, automated fault detection, and predictive analytics. JLL Research found that 7 in 10 APAC CRE and business leaders prioritize advanced AI-driven building optimization over basic building management systems for future investments.

Adoption is already underway; 43% of APAC respondents leverage AI for energy efficiency today. Smart, AI-driven building systems deliver value across four interconnected dimensions: demand-led operations that respond to real-time occupancy, operational excellence through predictive maintenance, energy optimization via continuous commissioning, and employee wellness through enhanced indoor environmental quality.

While technology enables efficiency gains, people determine whether results endure. 8 in 10 APAC CRE and business leaders believe cross-functional collaboration is highly effective in delivering energy efficiency CRE goals. Long-term effectiveness depends on three critical human factors: on-site team capability, adherence to operational protocols, and cross-functional collaboration. A study of 28 RCx projects in Illinois identified training as the top factor determining if RCx savings persist; sites where facilities personnel received training immediately after RCx sustained savings significantly better. The implication is clear: optimization investments must include capability building, and not just technical or technological interventions.

The path forward is clear; optimizing current operations in existing buildings offers the most cost-effective near-term solution to meet decarbonization targets while protecting asset value and mitigating compliance risks. The evidence across APAC markets demonstrates that quick energy and cost savings are achievable without waiting for major capital investments.